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<div>
<p style="text-align: justify; line-height: 12pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Note 6. Real Estate Loans </font></b></p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font> </p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">We invest in residential and commercial real estate loans that we acquire from third party originators. We finance these loans through the Sequoia and Acacia entities that we sponsor or with equity or long-term debt. </font></p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 6pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font> </p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 6pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">The following table summarizes the classifications and carrying value of the residential and commercial real estate loans recorded on our consolidated balance sheets at June 30, 2010 and December 31, 2009. </font></p>
<div align="center">
<table style="line-height: 115%; width: 456pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="608">
<tr><td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; padding-top: 3pt;">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 9pt; padding-right: 0in; padding-top: 3pt;" valign="bottom" width="12">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; padding-top: 3pt;" colspan="3">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 9pt; padding-right: 0in; padding-top: 3pt;" valign="bottom" width="12">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; padding-top: 3pt;" colspan="3">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr>
<tr><td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><font style="font-family: 'Times New Roman','serif'; font-size: 8pt;" class="_mt">(In Thousands)</font></b></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" colspan="3">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"><b><font style="font-family: 'Times New Roman','serif'; font-size: 8pt;" class="_mt">June 30,<br />2010</font></b></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" colspan="3">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"><b><font style="font-family: 'Times New Roman','serif'; font-size: 8pt;" class="_mt">December 31,<br />2009</font></b></p></td></tr>
<tr><td style="padding-bottom: 3pt; padding-left: 10pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Residential real estate loans (held-for-sale)</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">$</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">2,404</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">$</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">2,374</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr>
<tr><td style="padding-bottom: 3pt; padding-left: 10pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Residential real estate loans (held-for-investment)</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">3,788,024</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">3,724,546</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr>
<tr><td style="padding-bottom: 3pt; padding-left: 10pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Commercial real estate loans (fair value)</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">19,485</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">12,089</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr>
<tr><td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 10pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Commercial real estate loans (held-for-investment)</font></p></td>
<td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">242</font></p></td>
<td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">245</font></p></td>
<td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr>
<tr><td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 10pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Total Real Estate Loans</font></b></p></td>
<td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">$</font></p></td>
<td style="border-bottom: black 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">3,810,155</font></p></td>
<td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">$</font></p></td>
<td style="border-bottom: black 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">3,739,254</font></p></td>
<td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr></table></div>
<p style="text-align: justify; line-height: 12pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><i><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font></i></b> </p>
<p style="text-align: justify; line-height: 12pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><i><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Residential Real Estate Loans Held-for-Sale </font></i></b></p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font> </p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Residential real estate loans held-for-sale are owned at Redwood and financed with equity. At June 30, 2010, there were 13 residential loans held-for-sale with $4 million in outstanding principal value and a lower of cost or fair value of $2 million. At December 31, 2009, there were 14 residential loans held-for-sale with $4 million in outstanding principal value and a lower of cost or fair value of $2 million. </font></p>
<p style="text-align: justify; line-height: 12pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><i><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font></i></b> </p>
<p style="text-align: justify; line-height: 12pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><i><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Residential Real Estate Loans Held-for-Investment </font></i></b></p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font> </p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Residential real estate loans held-for-investment are owned at the consolidated Sequoia securitization entities. </font></p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 6pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">The following table provides additional information on residential real estate loans held-for-investment at June 30, 2010 and December 31, 2009. </font></p>
<div align="center">
<table style="line-height: 115%; width: 456pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="608">
<tr><td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; padding-top: 3pt;">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 9pt; padding-right: 0in; padding-top: 3pt;" valign="bottom" width="12">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; padding-top: 3pt;" colspan="3">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 9pt; padding-right: 0in; padding-top: 3pt;" valign="bottom" width="12">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; padding-top: 3pt;" colspan="3">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr>
<tr><td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><font style="font-family: 'Times New Roman','serif'; font-size: 8pt;" class="_mt">(In Thousands)</font></b></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" colspan="3">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"><b><font style="font-family: 'Times New Roman','serif'; font-size: 8pt;" class="_mt">June 30,<br />2010</font></b></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" colspan="3">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"><b><font style="font-family: 'Times New Roman','serif'; font-size: 8pt;" class="_mt">December 31,<br />2009</font></b></p></td></tr>
<tr><td style="padding-bottom: 3pt; padding-left: 10pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Principal value</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">$</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">3,803,592</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">$</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">3,728,738</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr>
<tr><td style="padding-bottom: 3pt; padding-left: 10pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Unamortized premium, net</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">45,910</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">50,028</font></p></td>
<td style="padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr>
<tr><td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 10pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Allowance for loan losses</font></p></td>
<td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">(61,478</font></p></td>
<td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">) </font></p></td>
<td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="border-bottom: black 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">(54,220</font></p></td>
<td style="border-bottom: white 1pt solid; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: #ccffcc; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">) </font></p></td></tr>
<tr><td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 10pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Carrying Value</font></b></p></td>
<td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">$</font></p></td>
<td style="border-bottom: black 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">3,788,024</font></p></td>
<td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td>
<td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="text-align: center; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="center"> </p></td>
<td style="border-bottom: black 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; width: 4.5pt; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" width="6">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">$</font></p></td>
<td style="border-bottom: black 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom">
<p style="text-align: right; line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal" align="right"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">3,724,546</font></p></td>
<td style="border-bottom: white 3px double; border-left: medium none; padding-bottom: 3pt; padding-left: 0in; padding-right: 0in; background: white; border-top: medium none; border-right: medium none; padding-top: 3pt;" valign="bottom" nowrap="nowrap">
<p style="line-height: normal; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p></td></tr></table></div>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font> </p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">In April 2010, we sponsored a residential prime jumbo mortgage securitization through our Sequoia program. At June 30, 2010 the loans owned by this Sequoia entity had an outstanding principal value of $226 million. </font></p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font> </p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Of the $3.8 billion of principal and $46 million of unamortized premium on loans held-for-investment at June 30, 2010, $1.8 billion of principal and $30 million of unamortized premium relates to residential loans acquired prior to July 1, 2004. During the first half of 2010, 4% of these residential loans prepaid and we amortized 9% of the premium based upon the accounting elections we apply. For residential loans acquired after July 1, 2004, the principal was $2 billion and the unamortized premium was $16 million. During the first half of 2010, 4% of these loans prepaid and we amortized 8% of the premium. </font></p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font> </p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 6pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Of the $3.7 billion of principal and $50 million of unamortized premium on these loans at December 31, 2009, $1.8 billion of principal and $33 million of unamortized premium relates to residential loans acquired prior to July 1, 2004. For residential loans acquired after July 1, 2004, the principal face was $1.9 billion and the unamortized premium was $17 million. During the fourth quarter of 2009, 2% of these loans prepaid and we amortized 4% of the premium. </font></p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 6pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font> </p>
<p style="text-align: justify; line-height: 12pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><i><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Commercial Real Estate Loans at Fair Value </font></i></b></p>
<p style="text-align: justify; line-height: 12pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><i><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font></i></b> </p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Commercial real estate loans at fair value are owned at the consolidated Acacia securitization entities. At June 30, 2010, there were four commercial loans at fair value with an aggregate outstanding principal value of $23 million and an aggregate fair value of $19 million, one of which has been delinquent since May 2009 with an outstanding principal balance of $4 million and a fair value of $3 million. At December 31, 2009, there were four commercial loans at fair value, with an outstanding principal of $23 million and a fair value of $12 million. </font></p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font> </p>
<p style="text-align: justify; line-height: 12pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><i><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">Commercial Real Estate Loans Held-for-Investment </font></i></b></p>
<p style="text-align: justify; line-height: 12pt; margin: 0in 0in 0pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><b><i><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt"> </font></i></b> </p>
<p style="text-align: justify; line-height: 12pt; text-indent: 15pt; margin: 0in 0in 6pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"><font style="font-family: 'Times New Roman','serif'; font-size: 10pt;" class="_mt">At June 30, 2010, there was one commercial loan held-for-investment with $0.5 million in outstanding principal value and a carrying value of $0.2 million. During the first half of 2010, we charged off a $10 million commercial mezzanine loan with no impact to our consolidated statements of income (loss), as we had fully reserved for this loan in 2007. At December 31, 2009, there were two commercial loans held-for-investment with $11 million in outstanding principal value and a carrying value of $0.2 million. </font></p>
<p style="line-height: 115%; margin: 0in 0in 10pt; font-family: 'Calibri','sans-serif'; font-size: 11pt;" class="MsoNormal"> </p> </div>
Note 6. Real Estate Loans
We invest in residential and commercial real estate loans that we acquire from third party originators. We finance these
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Includes disclosure of claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables.
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
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